Three altcoins look bullish even though the crypto market can fall another 50%, says former BitMEX CEO


  • Former BitMEX CEO Arthur Hayes believes Bitcoin and Ethereum prices could crumble under massive selling pressure from liquidations in short-term. 
  • Hayes revealed undervalued altcoins that could plummet lower, but have a strong utility and bullish potential. 
  • Hayes highlights the fact that critical DeFi verticals are on sale right now, based on his fundamental analysis, these tokens could explode even in a bear market. 

Former BitMEX CEO Arthur Hayes addressed the liquidity crunch that has hit the crypto market. Hayes believes Bitcoin and Ethereum prices could bleed further and identified altcoins that have bullish potential in the bear market. 

Hayes identified these three altcoins with bullish potential

In light of the Celsius and Three Arrows Capital liquidity crisis, Hayes addressed the bear market conditions and argued that financial services have lent themselves to natural monopolies. In major DeFi verticals, there are three to five protocols that are regularly used by investors and they generate real revenue. 

While the protocol value of their competitors could quickly trend to zero, the tokens of these DeFi projects could continue to grow, even in the ongoing bear market. Hayes analyzed projects built on the Ethereum network, under the assumption that over time, the number of Ethereum wallets will expand exponentially. 

The total addressable market, or size of these DeFi protocols could continue to grow. Bear markets are characterized by short periods where activity and revenues of DeFi protocols fall or stagnate, however the total fees generated by these tokens will continue to expand. 

ENS: Open expandable naming system built on Ethereum 

The Ethereum Name Service (ENS), that offers simple domains that are not just usable websites, but tradable assets are trading on platforms like OpenSea and LooksRare. Users can purchase a “.eth” top level domain from ENS, pay fees in Ethereum and trade it in the open market. 

Hayes evaluated ENS in the secondary market and noted that the project is the 15th most traded one over the past week and 27th most traded one in all time. The number of ENS domains created to date has grown exponentially. 

Hayes believes ENS could mirror its Web2 counterpart Verisign’s success and trade at astronomical P/E ratios. 

GMX: Hayes argues for future bull case for DEXes

Hayes argues that in the current crypto ecosystem, derivatives trading volume should be orders of magnitude higher than spot volumes. Hayes stresses on a future bull case for decentralized exchanges and considers GMX, the best one among competitors. 

While the decentralized spot and perpetual exchange currently supports low swap fees and zero price impact trades GMX is not advanced enough to truly capture the fee wallet of DeFi leveraged traders en masse. 

Hayes believes GMX has the potential to facilitate trading volumes much higher than spot decentralized exchanges such as Uniswap and Sushiswap. 

LOOKS: Hayes considers this the first market cycle for NFTs 

The former BitMEX CEO revealed that he believes this is the first real market cycle for tradable NFTs, therefore it is rational for digital asset and metaverse businesses to witness a 98% drawdown from their all-time highs. 

Hayes believes LooksRare, a community-first NFT marketplace that offers users rewards for participating and exploring the market could offer 2x to 3x earnings to its investors. While the volatility is higher in case of NFTs and digital assets, Hayes believes tokens like LOOKS are call options on an uncertain future, but they hold high intrinsic value. 

The P/E ratio or price-to-earnings ratio is a quick way to see if a stock is undervalued or overvalued. And the lower the P/E ratio is, the better it is for potential investors. Hayes shared the P/E ratio for LOOKS which is considered relatively low in its current range, between 0.9x and circa 3.3x, and therefore presenting good value. The long-term average P/E ration for the S&P 500 for example is roughly 16x. 

P/E ratio of LOOKS

P/E ratio of LOOKS

While Hayes has predicted a drawdown in Bitcoin and Ethereum prices, the former BitMEX CEO remains bullish on DeFi tokens

Analyst believes Bitcoin hasn't hit bottom yet

FXStreet sat down with technical analyst Eric Thies to evaluate where Bitcoin price could be heading next.

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

XRP struggles near $0.7440, could still sustain rally after Robinhood listing

XRP struggles near $0.7440, could still sustain rally after Robinhood listing

Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.

More Ripple News
Dogecoin price forecast: Miners offload $240M as DOGE approaches risk zone

Dogecoin price forecast: Miners offload $240M as DOGE approaches risk zone

Since Donald Trump’s victory on November 5, Dogecoin has emerged as the best performing asset among the top 10 ranked cryptocurrencies. On November 12, DOGE reached a new milestone price propelled by Trump’s statement confirming Elon Musk’s involvement in the incoming administration. 

More Dogecoin News
Ethereum Price Forecast: ETH's declining supply could fuel bullish pressure toward $3,732

Ethereum Price Forecast: ETH's declining supply could fuel bullish pressure toward $3,732

Ethereum is trading near $3,220, down 2.5% on Wednesday after its supply began trending downward. The declining supply could fuel bullish pressure for the top altcoin, especially as institutional demand for ETH ETFs is also rising.

More Ethereum News
PEPE hits new all-time high, rallies nearly 50% following Robinhood and Coinbase listing

PEPE hits new all-time high, rallies nearly 50% following Robinhood and Coinbase listing

PEPE rallied over 50% on Wednesday and hit a new all-time high after crypto exchanges Robinhood and Coinbase announced they would list the meme coin on their respective trading platforms.

More Pepe News
Bitcoin: Further upside likely after hitting new all-time high

Bitcoin: Further upside likely after hitting new all-time high

Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP